Low-cost carrier Fastjet Plc has obtained clearance to start daily passenger flights between Kenya and Tanzania from January 11, 2016, increasing competition for legacy carriers like Kenya Airways and Ethiopian Airlines on regional routes.

The airline will charge $50 to $80 plus regulatory charges and airport taxes between Nairobi and Dar es Salaam and Nairobi and Kilimanjaro.

“Two new routes, Dar es Salaam to Nairobi, and Kilimanjaro to Nairobi, are now on sale, with one way fares starting from as low as $80 and $50 respectively, plus tax,” said the London Stock Exchange listed firm on Wednesday.

Fastjet Plc, the holding company of Fastjet Tanzania, said clearance had been given under the two countries’ Bilateral Air Services Agreement. Fastjet has been using a fleet of Airbus A319s in Tanzania since its launch in November 2012. Fastjet Zimbabwe was launched in October 2015.

The entry into Kenya will diversify Fastjet’s revenue streams as public spending reforms led by new President John Magufuli have reduced government business. 

READ: Fastjet flies back into Kenya’s turbulent skies

The Tanzania Civil Aviation Authority (TCAA) had accused the Kenya Civil Aviation Authority of serving the interests of Kenya Airways by continuing to withhold operation licences for Fastjet.

In retaliation TCAA in February capped frequencies and limited entry points for Kenya Airways into Tanzania. The action was suspended after the two authorities agreed to resolve the dispute.

Fastjet expects to launch flights between Zanzibar and Nairobi and Dar es Salaam and Mombasa later in 2016.

On Tuesday, Fastjet saw its shares fall after it warned of lower-than-anticipated revenue in 2015 and 2016 due to challenging market conditions and currency losses. The shares recovered by 13 per cent on Wednesday, bringing its capitalisation to $43 million, after investors factored in the news of the new flight.

“Passenger traffic between Dar es Salaam and Nairobi, which have a combined population of over 8 million people, has been limited by high air fares that, we believe, have excluded large parts of the local population from air travel,” said Fastjet chief executive Ed Winter. The alternative is to drive upto 12 hours by road.

Stiff competition

The battle for market share is set to intensify with the entry of Fastjet as Kenya Airways and Ethiopian Airways, the regional giants, are busy fending off stiff competition from carriers of Middle East countries.

“As has been the case with other routes that we have launched, we expect to stimulate the market as passengers embrace Fastjet’s great value, safe, reliable flights and move from the road to the air,” said Mr Winter.

He said international route approvals are expected soon to allow the start of Fastjet Zimbabwe operations in 2016. It has also applied for an Air Operator Certificate (AOC) in Zambia.

READ: Fastjet adds Zimbabwe base; next is Zambia

Fastjet Plc’s upcoming destinations include Johannesburg, Harare, Lusaka and Entebbe. The firm is likely to take up the Harare and Johannesburg route after Fly Africa lost its AOC over unresolved problems outlined by a High Court ruling in Harare and massive tax claims by the Zimbabwe Revenue Authority.